Invitation Homes (INVH) 27 Jul 232023 Q2 Earnings call transcript

Company Profile

Participants

Scott McLaughlin	SVP, IR
Dallas Tanner	CEO
Charles Young	President and COO
Jon Olsen	EVP and CFO
Josh Dennerlein	Bank of America
Eric Wolfe	Citi
Jamie Feldman	Wells Fargo
Steve Sakwa	Evercore ISI
John Pawlowski	Green Street
Austin Wurschmidt	KeyBanc Capital Markets
Brad Heffern	RBC Capital Markets
Daniel Tricarico	Scotiabank
Haendel St. Juste	Mizuho
Keegan Carl	Wolfe Research
Dennis McGill	Zelman & Associates
Derrick Metzler	Morgan Stanley
Anthony Powell	Barclays
Juan Sanabria	BMO Capital Markets
Tyler Batory	Oppenheimer
Linda Tsai	Jefferies
John Pawlowski	Green Street
Jason Sabshon	KBW
Daniel Tricarico	Scotiabank
Jamie Feldman	Wells Fargo

Call transcript

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Operator

Greetings and welcome to the Invitation Homes Second Quarter 2023 Earnings Conference Call. All participants are in a listen-only mode at this time. [Operator Instructions] As a reminder, this conference is being recorded.

At this time, I would like to turn the conference over to Scott McLaughlin, Senior Vice President of Investor Relations. Please go ahead.

Scott McLaughlin

welcome. and morning, Good from Young, with Officer; President Vice Financial Olsen, today Executive and Tanner, Officer; Executive Officer. Chief and Charles and President Invitation here Dallas Homes Chief Jon I'm Chief Operating

will we analysts. follow-up you'd you like re-queue sell-side interest limit remarks, prepared to the our conduct question-and-answer question our In ask session we time, a if one to question. a of yourselves ask covering with that then Following and

and second today's and This supplemental call, Investor release we our XXXX During after is closed at of website the information. our was market quarter yesterday reference on issued Relations document section www.invh.com. earnings may the available

and describe make are on those and some does cause relating this performance report to Invitation differ so. actual business, not and annual future of to capital statements We and Homes we update our may include to time XXXX materially other liquidity risks risks could these our during non-historical make to SEC with statements Form resources to we subject uncertainties statements any expressly and which time. from the outcomes forward-looking statements that of results obligation disclaims Certain from indicated. do results, or the call and uncertainties XX-K forward-looking filings other in financial

We non-GAAP measures financial discuss may certain also during the call.

to You regarding non-GAAP comparable most the reconciliations measures can GAAP information yesterday's including additional release. find measures, in earnings these

our call Dallas, over Chief the turn to Officer. now Executive I'll

Dallas Tanner

Good morning. for And thanks us. joining

our and Invitation remain for markets favorable ability deliver Fundamentals to times particular continue very points. and These price our to industry our strong exciting Homes product once demonstrating with again be for results. in

discuss creation seek fantastic great and a every my a few day in sound detail to with these strategy. we during experience today. prepared value continue our and to more you Our through allocation like remarks capital teams of I'd are providing find opportunities resident

for rental approximately with $XXX X,XXX of creation single our million. homes purchase and nearly First, let's recent value begin family

As XX focus. growth a years, the continues believe with last approach. and opportunities approached I'm transaction accretive over to And we with share we disciplined this why that in we've demonstrated pleased external strategic, you

this of price to a a exceptionally been replicate we We portfolio us attractive at believe that that represents values, bought pretty value buying today's Essentially, in purchase scale, giving have end-user of price. to meaningful would high a well-located our immediate market is growth homes through one-off impossible a environment. discount benefits

will returns. our that help with expect mid-Xs Further, best achieve enhanced in the the to we us grow we anticipate platform in thereafter. Starting quickly one yield class year

growth of rent the more In product strong addition, own value that like the quality the are these believe will to of. great homes within of with particular, in right desirable and are neighborhoods infill location In we'd provide appreciation. we homes acquired type we line and

homes of overlap markets XX% Texas to and our of purchased homebuilder along this the footprint, with Carolinas. these Atlanta the work our outstanding Over existing we country. continue Vegas, across transaction, Outside and with Sunbelt Florida we including with Phoenix, partners Las our within

homes a additional new on new these delivery XXX an second homes took the During of and to we pipeline. added XXX quarter, brand product our

deliveries the second at under the million quarter. Our expected of at future remained end $XXX just

operators Investment multi-channel us and insight add next Moving external joins acquisition expansion on to as excited his from and we smaller through we homebuilder further our Eisen week we growth disciplined including explore additional Scott smart growth Officer, bulk, previously forward, focused an our of as Chief And remain pipeline announced, purchasing we're strategy. opportunities, as our

meaningful the for experiences and our time, will down At residents. keep same we heads continue more to our create

us developing new our services customers. our to growing ancillary business engage just and ways So for with

business. to topic want fundamental ongoing I discuss tailwinds our the for second is The

to strong come. future be the We of ages years to new old. and continue to of resident to old. indicator almost years the million these XX.X are population or U.S. expect and families the this our We Nearly years our XX XX demand age between for for one-fifth many of support objectives as people believe of approach XX average a they our form business growth

reflection a of the overall in average rates, home our single an new for for Burns, is supply. from per enhanced increase has the is This lease of on been in than cost rising Demand further nearly homes one a and to latest of lack mortgage buying homeownership. data but not home month cheaper by of the burden $X,XXX family John also the According markets. leasing only a housing

below In or addition, non-core and ability underperforming rates, help in remains proceeds for capital cap attractive assets accretive turn those This prices. home inventory use support our well to at recycling. sell to for-sale demand, continued which aids

by to credit This to allows positive to platform their of to to We're Moving improve residents in our Esusu. partnership on my housing reinforce no most which and help this our residents. credit and using choice, residents partnership cost our achieve resident experience at to to is residents our choice profile how improve to the our helps their continue Esusu's example proud now build reporting flexibility. The credit goals offering order our third with financial all topic, is we remove to faster. barriers resident good to recent commitment

growth we the favorable us both and trends we continue believe creation, will pursue. would we our commitment, to that demand and and how instrumental sustained residents and flexibility growth We for are which have which position to demographic like for I'm to hard thanks associates driving In rentals, single-family our dedicated I value choice relentlessly work our increasing the successes. today. by and for been well my excited express the provide closing, to executing

pass that, it Operating Chief I'll President and With Charles, to on our Officer.

Charles Young

Thanks, Dallas.

finish to our outstanding this to and leasing, we another drive hard for still the of season, best for control teams were within industry. the Once all the peak service what quarter. close strong. including I'd of work our to do all to great busy point controlling to We again, stay year their diligent like on out maintenance work to to season the able and and momentum we thank providing summer experience have positive resident associates build through in can about

to proud strong results includes the very have delivered. we've and This made and to for recent X,XXX established existing we're smooth expect effort our portfolio from the a portfolios, teams and acquisition. teams be great of we on up the buying that putting Through scale, dedication the I'm homes our the our of execution But nearly professionalism this transition. bring board playbook our larger

to our have from we're outstanding the a to house residents mission, Homes a all our for new just thousands We're pleased expect them Invitation best family. genuine that service with joined accordance care have home of very offer making our us. residents In who of come and

Moving second NOI of growth expense same-store of X.X% same-store quarter revenue our and X.X% operating on by year-over-year. This growth XX.X% grew core to same-store was core by results, driven

The core X.X% main year. quarter working income. in second progress Notably, drivers we monthly continue of through other great this revenue our rate make X.X% and to were growth compliance a lease same-store average increase backlog increase rental in our on

since sequential rental improvement as basis second more quarter about in performance. basis this revenue, believe of the continue our debt points first of us of gross return points improvement XXXX. XXX quarter to the should bad markets making a XX We was pre-COVID Same-store

taxes, primarily administration expense increase second progress quarter and turnover with property the same-store lease compliance result year-over-year results, in our to in mostly driven backlog. we're the of expected in growth was by higher making cost, along core Returning property our

expenses in during by R&M expense a Our on greater X% favorable second growth the decrease was lower inflation. and partially quarter cost controls offset

of rates Lease cover year-over-year. year-over-year, X.X% same-store second growth while year-over-year. renewals I'll second Next, leasing blended in quarter. quarter lease grew on This rent rates the new trends drove X.X% X% grew

the average traditionally move-out the our during remained in strong biggest business. quarter second at XX.X%, which occupancy In season for addition, is

This with on We're pleased we at mentioned peak demand between includes progress seeing balance year lease rate this so earlier especially optimizing point the our we're season, far compliance this our struck healthy I leasing and considering the occupancy. for the move-out in backlog. and

of creating remaining the with season. back our end of is our positioned for occupancy We demand turnover, quality this with pressure While, through applicants moderation the additional the believe expected well future homes some along for on strong. we're peak new in and

for particular, have the new us now $XXX,XXX residents to income-to-rent past exceed a household income ratio of who X.Xx. over moved XX year, the average an in with months average In in resulting

a summary, half of second In great following XXXX, on the of maintaining first we're into going focused half our the year. momentum

the on delivering Our hard control We the outstanding to teams continue can our leasing where results. we provide best service to in lifestyle industry we and residents. focused are strong remain working for and costs ensure

Olsen, over now our Chief Financial the call I'll Officer. Jon turn to

Jon Olsen

Thanks, Charles.

topics. Today, I'll following cover the

acquisition. sheet, balance additional on recent an few along portfolio our with update grade-rated details a First, regarding our investment

quarter. second the for year updated full results lastly, financial XXXX Second, And guidance.

combination quarter, our we of I'll our At undrawn unrestricted billion available the sheet. through capacity end second had $X.X on credit over balance facility. a cash of in and revolving start with the liquidity

net of Our was end at XXXX. of X.Xx down as second of EBITDAre end to the the the ratio debt from X.Xx quarter,

total our swapped debt rate three and of our or under is of Just XX% quarters unsecured is debt fixed to over rate. fixed

well how desirable they strong growth emphasized sheet we positions should us opportunities, often arise. balance for believe We've our

quality is value. Our entry the to acquisition which location, and meaningful average the two week an million are underscored an growth. the acquisition per $XXX,XXX, portfolio's of a offers future homes last reflects home market $XXX of nearly for best outstanding of approximately With by potential attractive XXXX cost example. typically point discount indicators This

dispositions using average potential The significant higher acquisition the locations, powder and further outsized stabilized has the cash which an we our scale greater rate revolver. in premier to half was dry year we over by funded hand, time. In our X.X%. of cap first on our of drive even We believe through of addition, the at funded primarily Sunbelt efficiencies remainder enhances this acquisition accumulated including margins the in many

our to within targeted June Pro forma Xx to XX remains at net acquisition, the our EBITDAre comfortably for X.Xx range. ratio debt

to AFFO an accretive this per share acquisition in We portfolio expect this to immaterial and share to AFFO and for effect per beyond. remainder be of have year XXXX the on

on XXXX briefly our touch quarter results. I'll Next, second financial

X.X% core share, quarter NOI. to to year-over-year $X.XX in due increased primarily per an increase FFO Second

guidance. $X.XX Second X.X% full share. year-over-year to The quarter updated cover last XXXX per AFFO increased I'll is year our thing

same-store our growth from versus the full our growth is our are range X.XX%, of both prior After to an revenue to to X.X%, same-store expense execution fundamentals core maintaining up prior are XXXX the of which by of to NOI of or an of X.XX% favorable guidance increased points season, at points and XX same-store a guidance This midpoint peak driven growth of much remain X.X% basis our X.X% XX increase of X.X% year place, midpoint core increasing in we through basis guidance. guidance. expected guidance increased strong to with

in outperformance to balanced turnover in to growth due primarily resulting in half against of expectation second is our and first guidance in this occupancy the occupancy. revenue higher moderation rent trend some year, core to increase The the half, that will

of and reminder, property expenses, this the good credit of longer-term working lease a and continuing through is also primarily expected near-term the homes higher impact turnover residents result us progress improving releasing compliance of revenue to to in As backlog, has the the benefits stronger time. which our administrative but make over

we've so progress our and XXX new the for XX a between basis points. basis the as improved this to and with made XXX expectations pleased have of year a range debt result, points full full-year year at by far midpoint bad We're

per now and $X.XX of in AFFO was are guidance to FFO $X.XX range increase per which by guidance updated the in midpoint. expected at last share at range assumptions the the $X.XX $X.XX revised full-year year of per increases per share increased midpoint and section XXXX of regarding expect earnings midpoints and of AFFO core release. range also night's dispositions FFO a of full a of $X.XX $X.XX the to share, per our to an is Our share. the acquisitions Updated included also core We narrows share. ranges

restating I'll this and our in year for what half second wrap up excitement the of beyond. by lies ahead

creation on strategic our deliver to exceptional our growth for service to shareholders. drive value We and our will focus residents sustainable priorities, and continue

the line open please operator, for that, With questions.

Operator

Josh Our question Dennerlein Instructions] from of Bank comes go [Operator from Please ahead. first America.

Your line is open.

Josh Dennerlein

Hi time. the Yes. guys. for Thanks

you're will it Just to long touch kind capital recycling how to that base the planning the wanted portfolio your off of integrated there acquired, any bat? into on of And take is portfolio. I guess

Dallas Tanner

the this is for question. Dallas. Thanks Hi,

We integrating don't as yield Charles it's market we to portfolio that than far of XXX good easy. typically side, here on units have operational the any and As pretty more saved doing pretty the that. our have history has

we us capital disposition the enough allowed piece. space the active resale of get into do end-user on I And that think recycling. trying good Look, quality to call a accretive what did the I and on sales really to would supply having the decided we've capital has market high not to side is I been recycle in prices something to able homes pretty in when bullishly. the mid-Xs sell to recycling we in overall be kind think portfolio

hand product a to Charles, when speak. scale on I'll new market. how then you any it to And integrate into we over can it comes just

Charles Young

able said same other We've individual just Dallas Phoenix before, just market little see across it like But in markets. take Vegas basis, on and this well. for portfolios us. and to through bigger to want of we've been and and an been have a the this multiple more and it's

to our into sure care have systems, get great how residents. essentially that on manages we make we're we eyes it roll team genuine We a the providing assets, that we

as them in working out we there are just kind where a with it in of we're them turns and them basis now As out of their are and roll lease. - process - some and they on media it we getting we're in

Some them from and communicate up are there we it well. with of moving just pick soon, we them in then

positions, there's how now. kind exciting. process, and are of are of middle homes - real of different because proud right their it's it's ongoing on the it no teams I it taking timeline an am in in we're the So Its but

Operator

from From go Eric ahead. Citi. Wolfe Please

Your line is open.

Eric Wolfe

Thanks.

SFR Streets portfolios look the follow of like website but portfolio that in I'm the there. XX% other on range curious, occupancy are just XX% sort their the to opportunities go and of across occupancy on representative at at portfolios? - question you opportunity of you're to the Where the sort bought, of get this yield if up of If Just on what average. to question looks there's sort is higher long it Josh's margins. as an I then acquisition know that's that I expand type of looking a is

Dallas Tanner

I'll that what this of kind are about mentioned start early about now moment of having summer. not think folks this the think have smaller and at capital we've marketplace the obviously in of scale we efficiencies through operators There's run some talked look, talked And We in of good the really sort class there's with, with what of the the pretty in our what at business going forward. are terms and a some kind and themselves where going mid-scale visibility, a do and last. in margin the allow profile we markets you right a sort spring have of they lot operating about And efficient where of debate this high I to We've markets with - of for for. met platform, look history NDRs NAREIT. do the done we scale. I we as you creating

for companies margin month some is particular exhibited there this trade I create to, With compelling that this we opportunities in think like terms we that is be expansion. to we've sort going this we of markets. there did in call margin additional profile think ours, so the to that And we can look, existing in upside can how operate our of it, portfolio, add as it,

close in, example market our it for a Houston XXX are right? going And portfolios we've to or go that we and One want plus grow that Dallas reasons there doing is is call - to to Texas here. is these, homes got into minus

our we scale to as should things growth see enhancement. it efficiencies relative up that margin with these can we portfolios. we we some While opportunities actually think embedded there, it greater, and own, for helps additional operate Because the existing we call

and make like out it's of ready. think are it's may we going available what not long be that look, business really we the portfolio companies, and over time So, terms haul. management certainly we to of familiar estate, but over professional in one-size-fits-all opportunities ready, real we where there the sense for estate And lot to this with situation, in be real from a our are I want

Operator

Please Jamie Feldman question from from Wells next ahead. comes Our Fargo. go

Your line open. is

Jamie Feldman

Thank terms the an more I an it's what's and a you. update the call, backlog? are, to kind impact major through occupancy still complete about having you in. of importantly, just lease rate upside that even kind as of talked is, the backlog. compliance of guess normalized what you regular in you turnover quarter's us In work a how where large and markets lot Can last it give

Charles Young

Hi, this a part year the going Yes, in in were first compliance work backlog. to heavier of thought we as we see lease is we the Charles. regards the said, to that Thanks little for the question.

think, look QX, you to quarter-on-quarter. made XX up back progress quieter was started We've I see it at and numbers and can it in down as little good QX. our things points we in a pick going basis

markets movement. The to major see where are we the wanted

And NorCal. expected, with positive a turnover, made good we of it know is a the do through, see is of courts it's as come is Atlanta, that's flip backlog And in news we the progress has spike and some so that and was - hard sign going Vegas as but the we're bit nice that's and so SoCal, this little a that. all to to breaking when the getting side that

back And to some see mentioned through I allows half occupancy, peak move of so on as that my comments of the in us these pressure season. kind you'll homes and towards

is, still news strong. is really demand the But good

are executing able to are And so we teams well. release quickly,

in quickly, turning we're [Phase a residents healthy X] place. are homes So

but not we're there going. good. things that like are all work we signs the positive, is all So - we're This yet, way where through, to we is have still

low will QX, at and the we'll expect But we're mid the XXs. started end we I mid overall backlog. for we're back that up. with to this year XXs we up be this the XXs see down the think to to And in work-through ultimately, where I demand here come we strong, going roll we'll ended QX in going year,

markets of think be do markets the biggest like bleed year I Atlanta the mention the to next California. to is, are due - see Southern could I how thing portfolio most the and and one do. the we'll question, in Those the this will has you some markets, goal and worked into California, The to there to But our we are through have That's we others. hope. backlog work due a of and two impact your biggest size that Atlanta on lot markets if our largest year. Southern

Operator

Our next Please ISI. go Steve from question comes ahead. from Sakwa Evercore

line Your is open.

Steve Sakwa

for I quarter, just about you renewals great. for I where and third out, Charles, talk are July wondering the back go and for leasing kind August where was in half quarter are the say, Yes, and the year. the Thanks. could your guess, if spreads of of third expectations what did

Charles Young

Yes, thanks the question. for

out - We're terms as go our a out and the actually in not we we're recent see we're low know mid-XXs, really In of most being XXs to done October, we healthy. so July requests September on to and yet. renewal with

can low see renewals you the Xs, final healthy Xs, We'll the if where performance settles where numbers, in we're sevens, the but in the So, are leases will. seeing high same more blend of out. get new high

But typical this we for the of what summer. expected is

before we we're to income what household my right does of more it is there the above with bit get we're when now, healthy we'll homes but answer the renewals. that good like it these seeing release residents getting and turnover earlier, and quest still chance lease XXX,XXX. really demand a to moderates putting how mention I see and And - to given we question average New failed in little an good we're a and

our good we're So we've screening still board. criteria, up demand a good we're seeing in across the tightened shape,

the we back So QX, the peak of we see but expect that we'll same season we'll towards it see moderates half as more here. in of how get

Operator

John from go from ahead. Green Pawlowski comes Please question Street. next Our

is Your open. line

John Pawlowski

on your purchasing least for felt how to to deploying own year discount Thanks up question acquisition. an time. I Hi. earlier portfolio values? versus the a weighed this market the at - just portfolio you stock you have private just hear like was follow was Dallas, which you’re capital I it like even this larger

Dallas Tanner

create needle It's a is things John, which we certainly while quarter, question. maybe and of try over would would do do thanks we an Yes, I growth more what inside have the the terms what meaningful impact happened long for of call buybacks, for that move and with certainly it, some we we And as, really hi, to we the things about over have time to how company the never talked say an cash would and far in think of we done business view stock view distance. external the the to have and in something events time, flows near-term about also which better-quality and organization, want as it. we've strategically we've want

yield then you'd With high-quality of cap we're this rate something particular be call a consideration and time able us it process we take year-ish part inside think it it of X's four-ish other cost do going the that ancillary of we things a getting on around quick. portfolio on and pretty we're things them these period, in doesn't call pretty can to at recycling like to of things and you capital average, that's selling into to in what's that also a consistent that kind six of some kind our to look terms of look recycle the be is

long-term an to lean want ways of probably for create try kind current find shareholders. to our to to area anything, growth It's where we if continue better, in

we'll So long everything, but managing a consider we're here. view with

Operator

Markets. Please ahead. Capital next from Our Austin go comes from Wurschmidt question KeyBanc

Your line is open.

Austin Wurschmidt

thanks. Great,

growth the quoted revolver fund to know and portfolio portion the rate rent in achieve the underwrite cap finance plans to mid-X% but have deal, transaction? that you you to of year you of acquisition availability that what a sort I permanently are the one did On that what

Jon Olsen

. it's Austin good Jon. Hi, It's question

with primarily hand. this funded cash we on acquisition So,

million our million Of and revolver. of quarter. $XX of So on cash, it's in to funded $XXX the upfront cash that end of million million of was $XXX the prior a deposits $XXX draw that second about

the actual draw So, think is revolver from our small. fairly I perspective,

I things. think how of because it's say we I'll you we is permanent as always we what what tell consider capital, sort always approach

very we're fortunate we any One, have that maturities. don't near-term

sort would clock to at and that always be a do time. in the secondly, advantage something working market it. of so constantly ticking force of the So if that prepared, us conditions can to disadvantageous we opportunities warrant we But we're are take no there's background monitoring circumstances and market

Operator

question Our RBC ahead. Markets. next comes from Heffern Capital go Please from Brad

Your line open. is

Brad Heffern

talk of Yes, taxes thanks. how if you Good now about you with on information Texas would well guide? could the morning, impact And original everybody. as be that comment property Can have and legislation the the great. compares the you

Jon Olsen

fourth in property over expected a been we've year This the quarter due this entry to we was the on was up and tax the XX% that under-accrued a second talked Sure, quarters. in the of recorded we catch-up last three little quarter, call, in the about large primarily so year-over-year. fact last because first

So as about the elevated third that contributors property see and California, I we'll which would to a fourth three we'll quarter our moderation see in of the are XX% our result, tax then total total. in remind represent you again bill largest and tax increases quarter. year-over-year the Florida, Georgia some

While California largely is known.

fourth Georgia, quarter. and rates in change millage won't bills Florida until we receiving we know those the how For start tax

would full-year up big revise haven't guidance our anything to this us say, at tax property cause yet picture point, or we down. seen would I So that

laws would on things under also that the worked that think With fluctuate in compression going the so funding, redistribution beneficial, Texas far, Hood legislation per big this us is of some to tax and is going isn't a additional but respect state there. certainly much. while I expect a that's in for would based I don't value scheme a for decrease then I too $X.XXX to by calls of the the it's there Texas, Robin $XXX bill for a move available needle school grand the assessed tax to couple Thus point jurisdiction, how and out

Operator

Tricarico from ahead. Scotiabank. question go next Daniel Our comes from Please

Your line open. is

Daniel Tricarico

break basis-point for and rest compares Thanks. Jon to the of bad that you year. of same-store bad the components the maybe rents, debt. can how XQ debt revenue, occupancy the or XX Charles, in expectations down increase in And

Charles Young

Sure.

So, I the about call, a with assumption growth maybe something think respect to from bad that sort that of is to we're improvement well talked improvement last faster it's some as seen very pace marginal as our see. - we've debt we which of mid-single-digit our rate absolutely on experience encouraged

to to struck between the over that the trends against fact about going at cognizant to Charles rate anticipating balance that have and though, an talked in and higher be have look occupancy on is positive we the as also those past, impact time of the part a occupancy. we're very year has is of we As balance the do that there few and here we're fact next back continued months the turnover for

sure to we about And we're of so of guidance. those want that all think mindful facts when make we being

Operator

comes St. question Our Haendel from next

from Juste Mizuho. Please ahead. go

open. is Your line

Haendel St. Juste

morning out good Hi, there.

Just the portfolio. a couple on more

then that an basis. your curious, mid-X% the there, deals? doing capacity out just translate you're And is line cap what more pricing interest So seeing portfolio-wise, rate does Thanks. what you getting broadly IRR or into in on that portfolio with more targeted mid-Xs perhaps in more in

Jon Olsen

Hi, Haendel.

opportunities what the be over capital question, the markets be will on conversations of there's kind lot On would to other going next this is look, think to in talk for. of a say, I space and to the dependent think I allowing those year I last operators

right? make, In part, the how yield obviously, view, terms that return of one on cost. call It's it's it we profile we going two-part, of trade any in

basis risk-adjusted on like around expectations that. things would The HPA piece our a and into second take considerations

unlevered appreciation, call like and like obviously was if way. mixture probably so you digits, depends I We so and an just unlevered in a of things it would it yes. basis, healthy binary expect we'd markets an home this it's it in far price a on high-single that, This at transaction see look so the but

Operator

Research. Wolfe go Our next Please ahead. question Keegan from comes Carl from

Your line is open.

Keegan Carl

the . Yes, guys thanks for time

expectations the your expense, how just driver both 'XX a run-rate higher your think what So called and you this trending initial outlook same-store then the pretty and the year-over-year your big on versus on year a going one, commentary the press you is forward on curious, end be then turnover? increased good turnover turnover rest in is OpEx we're basis. I'm of for do going out to release, a of

Charles Young

I'll lease little anything. Jon look to going forward QX of really really to in difficult still than think as wants see will backlog. was really the a picked we're on we start We're we half low running add the compliance higher to knew year Charles. a we is was was is have QX. This which through and slower QX. to and turnover, second in when turnover of given expected to going It great. the year if Look, historically happen. up it here And It maintain little predict that kind into this

going the is here our or end say and year. of run towards earlier going that's of Atlanta what exactly get rate, about thought around talked The the impact. how where we're say, have be the given to back moderate if I start that to end it the will Hard just this biggest some to in like, of we Southern markets California quickly the to to

thing think turnover about to has impacts. it is The with that two

can, seeing costs this work we're this news the bit some that's to able lease as in a and is we're that's of transitory. that I to on year. the expenses. as not can you're and think And forward and a these we gives our in optimism look this impact through compliance, it numbers Some our work through as and little little we us it's good see some much - as think more take as And we'll next - turns this the of to as we year. what's going we longer, But fast

Operator

Our next ahead. from & question Associates. from McGill Please Zelman comes go Dennis

line Your is open.

Dennis McGill

ability the been year my that's more obviously be be think I you. thinking on appreciation I would Dallas, we're have Hi, MLS. would and and ago, where to about market the sitting the on on, expected price just buy a home pressure to than maybe there thank impacting everyone guess question, there's here

just between degree thinking are there Just to wanted And to portfolios hear reason about and can at does sell to impact there and go some why is dollars sell in where future? the of wouldn't much remains disconnect and these the you attractive the how the these ability more a to MLS the a that. what trading, portfolio that a yield do you're at

Dallas Tanner

last of good selling doing terms market. when as we this the the in low are of the And in it's scale - with you're costs good in Xs, one-off sell those think your of part I when associated Even think hard. anything Yes, fair Xs, Dennis. to anyone frictional some end-user is those question, kind sales. we that high that in Look, question, frictional have assume costs we're as really on I

because actually balance place I Look, structure. real about prices of a the it think of it homes an lock-in doing are that all there on that would family little X,XXX you're I homeowners sheet asset, tomorrow can I it's it's effect home I cost - the to If in and up how of sell space, that been not is attractive think difficult hey, really lot time, mortgages largely single - homes think could bit the more current what buoyed owning just I be have in a liability or the both think the a say, that the home. estate people would

our feeding of call mortgage are there's the And market But And of selling when is, the other business about of somebody it we've of think really we of a view is of as talked asset calls, still reality and when rates, an U.S. sort is an I lack supported. is frenzy creating of it's X% a for a and home. keeping that that - some inside we which XX% mentality mortgages lot in volume call. inside want really asset, to what's our

homes homes be - that, a And this talked about so selling more year. some little you and aggressive that we've see might bit us

large, prices feels we degradation But opportunities think by really portfolio, within the with of the market but in I we of I being spread and we can take a bid-ask agree have where when home have that not advantage healthy. buyer. sort our seen these you,

we great on markets and we view long with operate scale own want the single-family residential in a to have We owning it in.

to transaction, themselves opportunities figure makes how do expect So it when try those to show that if like us sense. this out one,

Operator

go question Adam Please comes Morgan Our next Stanley. from from Kramer ahead.

Your line is open.

Derrick Metzler

Derrick Kramer. today. an for do I on this wondering Hi, your was to on Adam rent loss Metzler Thanks. a update portfolio little lease across is bit if talk could you about trends and market

Charles Young

for strong as When of of new COVID out the strong. of maintaining to really Xs X Atlanta, have is or markets leading that in take of Florida, markets the side, out historically that a It's our get been year kind We're that been what's are and rates X% the markets last this markets the with seeing here lease lease five, in we're front been Orlando we QX, through a South new kind Tampa, Charles. that's Florida into Southern and really summer, That's QX so. renewal California, Carolina. have north mid in in high anomaly. QX six Yes, have we blend

steady the of and we'll September in is see we backlog of Xs earlier, they're the low talked end, that we're the Renewals because We're in news and holding of October year. kind and that that's through here Xs. to saw, we as be out were steady. great. demand, Good release the are been and not, where kind went able up we cleaning think about you new we earlier stabilizing homes mentioned high If we as I that'll

So I positive think through side. that that's as think real on we

all Vegas and in turnover John we highlighted rate when in balance and working actually as but be went through by impact a of backlog, turnover backlog, talked talking occupancy some Atlanta, isn't down in will year-over-year. about All have it's - where markets markets, certain markets a we're And between that the this this SoCal. QX

the only Vegas. is we're bit in a So And of it kind specific. seeing demand seeing is the across board, that softness little good we're market really

because of backlog, that some bit competition little the it compliance of the in is slowdown market in lease general. is and market Some in of some of it a is, there

we're paying it. to So attention

to we're strong finish year trying season strong. trends. overall, really finish off really And healthy and about peak good seeing excited the we're positive off So

Operator

question Powell Anthony from Barclays. from comes Please ahead. next Our go

open. is line Your

Anthony Powell

have good the success Hi, showing and certain partners and in others? on - good homes? to they you SFR space, new Are good see outlets Question morning. to for homes other less pipeline, homeowners. as selling builder do new interest to seen guys you continue we've And they homebuilders get in homes a selling

Charles Young

mentioned lowly we're call script pipeline. the the most the think I'd our they're adding envy on of that continually Well, I we a much are it's groups and would overall out they think of levered, position they're the taking sales build to to of the in, opposite, few relates that I And are stock. it sort say, builders companies out and home public housing can it because as share larger go there create. one U.S.

with align being Now a for actually product this for a time. of said beginning to for-sale built actually to long I that playbook business that professional homebuilding starting of caught partner with several some now natural want way is different this be on sort to to of of I through relationships is that we've think companies that able of buyer over sort work think some be the interest is way an with of management periods it's nice operator our us. really Pulte sponsored its

teams, to think done where coming and footprint. it to our starting nice want actually Peter partners hood business up the a frequency the we these grow to about I get largely to with that build helping and understand really strategy about And under really in, there. led our DiLello expect we have And talk of and our Eisen part were nice I job of a a now able think as company early so is side them by grow, Scott our

then think allows things overall the and customer that important time, influence to that under and and I think too really design fit for customer it have value is, feel, over the us is still our choice. which new strong an part they're to in And on their early and neighborhood for the brand experiences view thinking of it's hood also but factor get an home. composition I and I does like have to think product about a what And move-in view coming this, on us portfolio really

newer can't focus. is very the And product are stickier in instincts, we more enough with any a prove but my data, customer even this as bring some thing that this bit these lastly, a prove I an light yet has we over about I I little love out can't And which we it, time think emphasize of program. they'll G&A of

to us and playing a sheet of potential don't have dirt in really we tied strategy operators of in working our partner balance this partner in this of is that So time. with proven or for at business. just for kind That other point good lot We'd space riskier parts be up a rather continue them.

Operator

comes Sanabria ahead. Please next Capital Juan Markets. Our BMO from from question go

Your line is open.

Juan Sanabria

I increase end. of that? on like to up in I'm what early A expectations. expense mean taxes. change in same-store guide, the year and too towards seems churn picked couple temporarily apologize it I missed no has we're end guess, assuming bad Hi. debt the the the it drove decrease the questions. It's I I to tell is set but and lower, albeit to if and

increase Just in curious on what guide. drove expense the

on expected. the why second part kind is steady get-back out would of slowed you imply as there, pace renewals, that keep of that that the October And that is has or and increase is Xs, the numbers the number September, for just in a or some reacceleration, October then does September and the decelerated there that put

Jon Olsen

part hand Jon. I'll the take second of for Hi, first and your it the It's off Charles to question Juan. part.

it's couple of things. a think I

delay was end portfolio. terms I the say when there increased the in has is side, the month since On also it that that the bit as turnover a come, really in would up expense what show each seeing started a Charles we're of the first quarter. noted of of turnover to little

of sort on more seeing variety So guide on the in goalposts whole And kind that we to the items through a we're P&L. the it What is of suggested started make see of moving expense line impacts different the as did concentrated. sense. flow

going we to fundamentally to allow think is want for but to right? tenants is stronger cash back expenses. think important that flowing, business back it's get in we've I that's get that healthy remind working credit us them is It's into clear, homes, there just pressure be through to Now this done them that And backlog that. And I long-term, service, put our what something here. on short-term acknowledge those back we everyone

Charles Young

side. the on This I'll just add Charles. renewal is

peak come you the as As much also through kind the pushing kind you and really will summer of off-season in the been renewal that or for think market lease and of in trying or that side. of QX, high through you renewal that in strong historically QX the of there if in at cohorts we've portfolio to season mix out years about mid-teens, on we've capture that's new or on out side, last think the couple the been

pretty a summer high the coming come through, when renewals So they're off base.

where kind just if market demand, we go we realistic will. to opportunity out is, of an those get seasons, is didn't can still good what have half high in we're on back shoulder And you and do. So if there into as the we while you capture

market and implies, but So all that it that we it to can do implies at of when time. what through what that's of still of kind going plays you're I what think see we're we're seeing, that good capture homes we these portfolio strong some and can demand where seeing how to homes is generally it out for comes and

Operator

ahead. next question go from from Please Oppenheimer. Our Batory comes Tyler

open. is line Your

Tyler Batory

of out wondering on market? some some relationships, part look just and Good opportunities of rates you of capital on with as there? maybe of deals hold scale, in those, attractive these channel-agnostic, of conversation Dallas, build strategy, cap that Where some but some are do a And pretty on conserve pricing does commentary location-specific some other on on for acquisition are of opportunities traditionally quickly your the can MLS acquisition your What morning. been has bidding? builder deals, sense big the change, are of Thank given plus off MLS given you. just the make clearly portfolio more the the channel? Where if it follow-ups you channel, perhaps the some the to here. Few might the an the that like

Dallas Tanner

color think I for just you're and so that what that question, question great real-time how looking of seeing of these MLS relative things. basically a we view some we're in It's to

stroke broad a kind we've market, the hit couple on of painting look, a So this different ways. in

the in in markets, operate, low-Xs, once to if really. not might a if active the in that mid-X markets we while, today be our markets MLS XX In the scale, we in close touch and not probably, maybe it buying were really a some would of but couple

to us, we for So be been active, haven't clear. very

Really these space, our and through bigger pipeline talking the build product time then we last where opportunities four scale taking can been kind around much of of very really in some the quarters, spending we've not bought other integrate deliveries program just we've to new if resale merchant and operators property quicker. our much any MLS

as a not sub-X. impossible. Las all think scale I and a I between today below-Xs there spread bid-ask would sense just the of where for a some if Vegas, I occur, to that you inside think of do example, that's kind where in these. X is at buy before, X-cap, next It's it's can't and need portfolios mentioned to of one-off trade home And a

XX transact albeit spread point to that out reviewing of now hundreds view quite that out thing bit Most on because to stuff. we're entry write a any pipeline seeing we're play in builder we're don't right closer our the I putting year the in little a always at. wide. we're new to that striking love that at be new we'd call expected, are kind willing week product MLS the us, we in X-cap, putting for as is the it bit at and a and it contract. months So, of deliveries a offers a will We of so be one every look, that looking I price channel points

what levered. it beneficial should be dislocation. yes REIT. So, a to lowly just We're feels like This some be there's is

to from where like we a and right got our to feel platform about that can perspective. good into access of And have it procedure build services capital, still the our access bring everything else. chunks operating really liquidity and handle We growth can very we've and this in ancillary capital, a easily digested normal we

it's nose other keep a expect our ways market, in So, for scale the that good trying this markets see chapter to moment, to in today's but good down I of kind we and and a growth additional to find keep we'll - operate. create us

Operator

ahead. is question Please Jefferies. Linda from from Our next Tsai go

Your line open. is

Linda Tsai

taking thanks Hi, question. my for

from average portfolio? that a the rent homes more of on and you then your you're give about? terms integrating, For portfolio, And of rent in your these charge new the how us color for thinking existing you to what's can current compare what enhancement little does initiatives margin just

Charles Young

these $X,XXX, of markets in on took all about these our average So are. first in-place where markets homes your current are question, basically which is as rents, around these we XX% greater than rents for comprised the that

third and to all books, of lease your in embedded X% but sorry, question, terms own and in so question. in somewhere our we I it in this I'm last the portfolio, call our that, didn't opportunity we as question, loss last So get XX% same upside do accretive part between the the of do see

Linda Tsai

on more existing initiatives of what enhancement color from about? you're terms portfolio, into a margin your In just thinking little integrating

Charles Young

we the bring need to by our would Texas like would markets, basically early tell, to on XX%, headcount It's there. portfolio any too but we and really grow

slow of kind do services terms what will because that'll markets, and So play renew. those those some of ancillary, be expansion we as leases we like typically but additional bring of revolve process in two in see into a is

operating as so, our come updating the agreements services ancillary And and the when to mentioned in. able book on and actually those leases Charles as pricing, be updating lease and as that's we're will it into earlier and get we call, renewal

time. And so that will integrate in over

Operator

from from Green next John question Pawlowski ahead. comes Street. Our Please go

Your open. line is

John Pawlowski

supply to. maybe in the Vegas is the vacation-heavy rates Thanks are you was follow-up. you What alluded new hoping short-term the could other taking And seeing in shadow weakness related rentals, destinations? or Airbnbs think to on conversions lease from driving you specifically? traditional a in Vegas that notable growth in you on topic, pricing increase power of for Charles, and somewhat do rentals then Las I expand

Charles Young

your impact it's take on there. your question it's shadow last Yes, the much last out been always - Not there. I'll question piece, first. really Frankly,

question, home, a lease and they how be we've I approaching always a or fair may to sell it's homeowners low-interest and been but the given the driven that's against whether think rates mom-and-pops. by want competing mostly market

operating the Again, we're just kind of dynamic. within

its dynamics. real has going have trying we've is compliance. things lease up spike own There I to come, had open The a faster. about Vegas, Going to get to news the and a turnover in back One, as each on. the through really courts started talked couple market of is good move

against And own you. some so of our with we're be competing to supply, honest

some not operating in ones pressure, only the So that's market. put we're that but

puts some and backlog the same through So in there's the so that supply other supply going market extra that are temporarily.

the how long-term work out We Vegas get a trend. in is of now. that out us and in month see in It's change we'll book saw and our we year now don't to worked around to trying that it this exists What quickly any supply a there it right more will right over with of Phoenix right vision of We'll it this through plays as figure is it's own others. with But a two. pretty through in hard kind good some of or people now what, for see But if the last demographic and moving see time over of terms out time. market. we

Operator

comes KBW. Rahmani question Our ahead. Please next from Jade go from

is open. line Your

Jason Sabshon

on and you comment that increases is rate insurer potential Jason for been seeing? the Sabshon you Jade. on this solution please some outlook insurance we've property the a Hi, do Can for as captive for a see of

Charles Young

- thanks love last for insurance while year-over-year. went sorry, our will talked property the to to our up don't that I about the extent Hi, question. call, we say bill tax which on our we what similar

very things. and I fortunate, we've think of some to REITs the what other that's couple down heard from relative to a were of I think we

loss very a we One, favorable have history.

never have ever insurers broke with they Our even. on worst money Homes, Invitation year they last lost the when year had

that And big not compared dispersion of which of in say the certainly estate is Secondly, assets lastly, I granularity are to and would say a traditional the geographic terms chunky, and I mitigation. coastal. risk the would real commercial benefit we're

if think we So, where good landed. together, we all that I put you really feel about

neighborhood as the the think with the up we for third quarter, to I insurance XX%. should line the call, fourth expect see a of talked last increases XX% and full-year you expense quarterly about year-over-year item on little in being over

far just nature, for next to, year type who things one-and-done of that a lot insight not think going captives look last we've to strategy several we're alternatives, capacity is and of because we tuned seen are I I the the going histories stay loss different seen but can't to of give We've of As be a a a what lot of think renewal, it's think are to yet. into trying market. as leave be over I I is other going fairly whole evaluating to year's something And so a you - carriers situation. this our next recoup any into particular years, painful host

Operator

comes Please ahead. Tricarico next from Scotiabank. from go Our question Daniel

open. is line Your

Daniel Tricarico

Thank you.

could talked have longer your your today? think know, unsecured targets. than lower credit leverage raise back going you Jon, and you to debt Sorry, and question spreads in come about what earlier And being you you Austin's term do recently

stay So, of a view raise are the this to capital going do to that dispositions good preference? kind or as you time

Jon Olsen

most Dispositions far this Well, attractive of our have a couple been the capital year. of cost observations. question. for thus Thanks

in sold the even We bank plus. the that to under this then and higher X% and we've capital stabilized able earn an redeploy portfolio have then into trade, yield. average of that year-to-date homes put X% in with of something rate cash an case cap been And

to ground With capital - seem tighter the worked certainly GDP the So that pretty the strategic for though credit has have a that does respect report accretive by out this markets, morning. recycling bit unsecured think as we prospects dispositions us. driven with it for well that yes, little spreads

tenors I gapping bit. is market But to as a the little think going speak to out we continue the we're probably monitor

we opportunity where looks like. close off think variety of go on eye might regular run we deal business of track part of we keeping way new It's of just the sort set at want a constantly very the what tenors. to different a are We a keep how is

in the to sense if going work to to the position doing and background our we're I so it a in to move we is always quickly So, think do be don't change. approach makes think

Operator

from Your Feldman next Jamie ahead. go from Please question Fargo. comes Wells

Your line is open.

Jamie Feldman

thanks. Great,

seems mentioned, world. it Canada One, latest you. to wanted anywhere a as whether of the - the you shifting the like kind opportunities a in are thoughts get you're being REIT a as secondly or are U.S., and else are. source - I winds then the Just And of Thank of What your expanding where great thoughts on outside part two quick follow-ups. on your a it's REIT equity. time had issue equity capital Dallas, to be today. just

Dallas Tanner

Hi. Great question.

this run run XX,XXX I as pretty units or consistent think were units we in and terms XXXX as saying we in Seattle. in expansion, easy of XX,XXX we was Atlanta like

so more our different offer efficient run in a better we to of lot all all we I and and efficiency scale a be margin units. systems love heck markets to get markets. we'd of XXXX get And care with see we services, think closer ability can those see expansion, units XX,XXX We granularity and to see can pro

see I that our the would first on continue set, over other bit would And there and and very the variety like we also to expect to We've I an in record opportunity are San markets scale a density would we So appealing subject of guess, build just that would been all to reasons. trade. choice there operate. that in of Nashville little we some own like be Lake find markets to we time. Salt markets this - is be And and Antonio Austin City and for

But strategic fun a there were policies. have probably countries real get opportunity of know to most to it's or don't question restrictive why it, reality unless housing for a internationally build and it's more the And speculate these a think on. I is, I reason we improve a housing would that space REIT. we great this we in, we amazing it, an to have good - a place It's can just it, it. be and very can country we stay can just operate buy

In stewards Jon to in accountable equity, business. about our answered is we markets. daily ourselves think to about Look, the try to this capital we cost we capital and of think just hold And terms capital. smart of being this how

sub-four like disposing four non-core may country, little operate that on in new that a a we're I of smart of the reinvesting capital the and of good fairly to parts think kind be capital or time gotten allocators. mid-Xs a are being pushing harder there the of homes over X or I we've that cap marks construction. in

where It's a about. that share that really has our but That's a actually prices to world not code winning a reasons, of thrilled kind zip in our the better, of price funky. variety are - for strategy kind bit gotten it's trading. we're the look see right of home nice sort little we And it been at call when of now, all

price buoy to And capital Jon's see how time, we'd our you I performance up over good love to probably markets watch certainly the those think, will see so, even recycling point evolve, to said to further, afraid capital and I've as balance be before, stuff off and going not to comfortable being we're smart that SFR. access sheet but do this want we're partners with stock

so current we year. of the expect over second we'll in some I'd our about to availability venture coming And deploy Rockpoint that have start of $XXX million.

flow cash business. we're untapped good We have and to free continue revolver going this generate in an still to

look just and to remind some try opportunities So got business. we've the that, think of between I I powder to at ample all these dispositions go dry grow to to continue

Operator

over remarks. question-and-answer would closing to conference back any Tanner our session. like now This completes for Dallas I the turn to

Dallas Tanner

everyone the on appreciate seeing call. We forward everyone some you has support, look to in of and hope everyone's being fall. summer safe We rest the of a

Operator

concluded. The has now conference

You may now disconnect.

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